Propell (ASX:PHL) share price flying 18% on ASX debut

The Propell Holdings Ltd (ASX: PHL) share price got off to a flying start this morning following the company’s ASX debut. Here’s the lowdown.

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The Propell Holdings Ltd (ASX: PHL) share price opened 40% higher at 28 cents following the company’s initial public offering (IPO) this morning. The company had a listing price of 20 cents per share with an indicative market capitalisation of $19.2 million. 

In earlier trade, Propell shares jumped to an intraday high of 31 cents before retreating to their current level of 23.5 cents each, up 17.5% for the day so far.

The IPO will raise a combined $6 million for the company to pursue its growth strategy. 

Propell share price off and racing 

The Propell share price got off to a roaring start today with the company’s successful listing on the ASX. Propell operates in the alternative finance and payments markets, as a digital alternative to traditional banking platforms.

Traditionally, SMEs (small to medium enterprises) have to manage and deal with multiple providers to access financial products and services. According to Propell, it offers a platform that brings together a range of financial services and products under one consolidated and easy-to-use platform. 

The company currently has two core products. First, a proprietary lending product that provides unsecured lines of credit to customers through its Credit Decision Engine. Second, a transactional product, which is a simple and straightforward payments solution that can facilitate various non-traditional payment methods. Propell also offers business insights data to help businesses view and track how they interact with customers.

It is important to note that Propell is a loss-making business. In FY20, it generated $592,954 in revenue, an earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss of $1.54 million and a net loss after tax of $2.7 million. The company has pointed to a number of initiatives to drive medium to long-term shareholder value. 

Future growth 

According to Propell, it is focused on a number of key strategic initiatives to build its product offering and drive customer growth. 

The company aims to both develop new lending products as well as partner with third party alternative lenders which offer differentiated lending products. Instead of developing its own technology for different types of credit, Propell will partner with different lenders through integrations on the Propell platform. 

Propell also aims to build out its transactional product to provide its customers with greater flexibility in getting paid. This includes connecting a greater number of third parties to the platform, including buy now, pay later (BNPL) providers, to enhance the experience for their end customers. 

Propell will also continue to invest in its technology to increase its value proposition to customers. Its current focus is on developing automated actionable insights that allow for better cash flow management and optimisation. 

Finally, Propell has made a small investment into exploring international opportunities. The company will assess entry into new markets over the medium to long term on a case by case basis. 

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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